Development/ Innovative Ideas/ socialwork

Innovative Ideas
S.Rengasamy
Faculty Member
Madurai Institute of Social Work
Alagarkoil Road, Madurai-625002
Tamilnadu, India

Description of Idea:

The organization and promotion of SHGs, savings and credit linkages in a way made several positive impacts in the rural financial sector. The participation of the rural poor in SHG activities invariably helped them to meet their planned expenditure, repayment of existing debts as well as to make new investments to augment their earnings. Since poor has to face several odds over which they have no control, they could not totally plan their finances. Delay in getting wages or any payments, wage loss due to several personal, seasonal and social causes, sudden illness make the poor to feel insecure and the coping strategies they adopt further immobilize them. In the context of declining mutual support to tide over the temporary emergencies poor has to depend on those who either extract free labor or allowing themselves to be used by other forces (political / communal), or to loose their dignity. Where the SHGs’ are running successfully, though the quantum of dependence with moneylenders has been considerably decreased poor are yet to free themselves from the clutches of moneylenders. The poor needs a liquid cash to tide over certain limitations. Either SHGs or banks are not administratively viable to help the poor. To be with the poor and to help them in a dignified way is a challenge and it demands creativity as well as innovativeness.

The idea that is proposed here is to evolve a security system by promoting a security card worth of Rs.1000/- using which the poor (who are already members of SHG) can avail certain basic goods and services from the local shopkeepers (provision stores to purchase food materials, animal feeds, limited quantity of fertilizers etc.) and service providers (qualified local doctors). In order to bring family finance under women’s’ control; only women are eligible to use the card.

By using this card the poor women can purchase the family necessities not only the during the crisis period but also in normal times in order to plan the family as well as other requirement. They can make purchases or avail services from a list of service providers as selected by them and the repayment will be looked after the NGO promoting this card and the cardholders make repayment in the group. This system will function like a credit card system but the philosophy underpinning this concept is not to encourage consumerism but to extend security to the poor rural households. A comprehensive system of checks and balances and training is thought of in order to make it security oriented than consumer oriented.

Title of the Idea
Family Security Card
– a system of providing security to rural families against wage loss / delay in getting wages / ill health and other unforeseen odds that makes them to depend on money lenders or mutual help which is slowly eroding

What is your idea, and how does it attempt to address the theme?
If we want to explain our proposed idea, to make it immediately intelligible, unfortunately we have to equate it with the concept of Credit Card about which many people have their own reservations for it encourages consumerism. But our idea is evolved from the careful observation of a time tested local practice called “Ethir Chittai” (ethir – opposite i.e. customer as well as shopkeeper; chittai – account slip). Ethir chittai is a privilege given to certain credit worthy low-income families by the local shopkeepers by keeping a two way accounting procedure where the account holders can get credit as well as make debits as per their convenience – it avoids false accounting and encourage the customer to be responsible).

Our idea is to widen the scope of this practice by steam lining the transactions by organizing the consumers (members of the self-help groups) as well as providing a guarantee of repayment to the shopkeepers and other service providers. The system we call it as a security card as it provide security to the poor against certain odds (delay in getting wages, inability to engage in wage labor due to transport, weather, social commitments / functions, death in neighborhood, sickness or any other unforeseen emergencies) as well as shopkeepers and service providers.

How is your idea innovative to existing approaches?
The popular concept of self-help groups with its savings and credit linkages mainly cater to the needs of planned expenditure. The financial transaction practices as evolved by the SHGs’ has no inbuilt mechanism to meet the liquid cash which is very much needed by the poor families if there is a delay in getting their wages or loss of wages for several reasons or sudden illness etc. keeping a sum with SHG without revolving it is a major reason for the groups to get disintegrated.

The practice of various types of mutual help through which poor used to get cash or goods is also slowly disappearing. The need to have a liquid cash constantly bother the poor and to get this either they have to provide free labor / sacrifice their dignity or to get it from moneylenders.

The security card is complimentary to SHG concept, but it innovativeness lies in the system of extending a liquid cash in the form a card worth about Rs 1000/- that the selected poor families can use it as per their capacity of repayment.

To what extent does your idea address poverty reduction in your country?
The concept of security card directly addresses the poverty in several ways. Basically it creates a psychological security by creating a feeling that there is a system to fall upon during emergency. The poor also made to realize that the system is not based on charity and if at all they have use that they have to be responsible. Combined with SHG, the security card makes the poor to be independent and strengthen their bargaining power. There are number of ways the card and its value can be imaginatively and creatively used. Group purchases / activities can be planned to retain the profit.

Will your idea be sustainable beyond the pilot base?
The idea is sustainable as it is conceived as an additional activity of the already existing self-help group activity. NGOs help is needed in the beginning in order to negotiate with the service providers, but in due course the SHGs can take up the responsibility on their own. Security card is just adding value to the SHG concept- serving its members to meet the liquid cash requirement.

What characteristics of your proposal would you highlight to suggest this?
It is expected that every one concerned with the card – the SHG members, various service providers will try to sustain it because of the security it provides. For shop keepers and other service providers there is a regular customer base which they don’t want to loose it. For the primary cardholders it is a security against several odds. The cardholders though they are poor will be treated on bar with other customers because of their improved purchasing power that too in considerable quantity. The service providers will try to provide quality service because the cardholders can change them if they are not satisfied with their service. There are checks and balances and this will help the system to sustain on its own.

What is the possibility of your idea being implemented elsewhere by a different organization or within another part of the country?
There is every possibility to implement this idea in other areas. SHGs has become an universal concept and almost all the NGOs are invariably involved in this. Promoting managing and handing over the security card is similar to involving in micro enterprises. Security card doesn’t require either new organizational structure or new business venture rather it entails the integration and disciplining of the existing business enterprises to cater needs of the poor.

What are the expected results of your project/Whom will they benefit?
It is expected that the operation and implementation of security card in a group context will bring both expected and unexpected positive results. The card will definitely make the service providers to accept the poor people as viable customers and this lead to the assertion of their rights. Since the card can be used only by the women and whatever purchases made or services used will have a direct bearing on the food security of the family, other needs and health of the children and women.

Can you demonstrate that your idea has ownership among a broad community and institutional base/
This idea is already owned by the community (already in practice in the form of ethir chittai) and there exist an institutional base (business concerns like provision stores and service providers and SHGs.

Contact Information
Prof.S.Rengasamy, Madurai Institute of Social Sciences, Alagarkoil Road, Madurai, 625002, Tamilnadu, India. Telephone.0452-2 681926 e-mail: essar3@rediffmail.com

Primary Partner Contact Information
N. Rajendra Prasad, Secretary, Peoples’ Action for Development, No.7, Karthiknagar, Pasupathinagar Extn., P&T Nagar, Madurai – 625 017, Tamilnadu, India. Telephone: 00 452 2641805
Geographic Area
PAD’s working is working among the fishers and palmyrah tapers of Gulf of Mannar region, Tamilnadu. The Gulf of Mannar is located on the southern maritime border of India’s 6th most populated state, Tamil Nadu. 98 villages are distributed along the shores of the Gulf, where an estimated 72,766 people live of whom approximately 1/3rd are estimated to be active fisherfolk. Fisheries is primarily based on the traditional wooden crafts (known locally as Vallams and Vathai), which from Gulf of Mannar districts contributed 46% to the overall marine fish production of the state (in 1998-1999).

Keywords
Self help groups- micro finance – rural finance - liquid cash to meet the unforeseen expenditure – market accessibility and discipline -